In the ten years or so before my wife (English born and bred but now a proud Kiwi) and I returned to live in New Zealand, we flew back to New Zealand from Britain on many occasions. We always felt, as we boarded the Air New Zealand flight at Heathrow, that in doing so we had already returned home.

There was something about the atmosphere on the plane, as we settled into our seats for the long flight, that was quintessentially New Zealand. Whether it was the soft New Zealand accent, the ready smiles of the cabin staff, that attractive combination of efficiency and friendliness that Kiwis seem to manage so effortlessly, there could be no doubt that we had already engaged with a slightly different culture from the one we were leaving.

That sense was reinforced, I recall, on one flight that took place while a rugby test between the All Blacks and South Africa was being played. We, with many others on board, were keen to know the result. The captain obliged by relaying the score to us throughout the flight, and he was greeted with a mighty cheer when he reported that the All Blacks had won (this is, after all, a good news story!)

On one of our earlier visits, I recall my wife wondering out loud as to why everyone we met (and by that she meant not people we knew but those we came across in shops, hotels, restaurants) was so friendly and helpful. I attempted an answer by observing that whereas the British class system meant that many of those obliged to serve others did so either with excessive obsequiousness or with sullen resentment, Kiwis had no such hang-ups.

These recollections were brought to mind when we once again boarded an Air New Zealand flight to fly home last week. We had flown with a different airline (which will remain nameless) on two legs of our journey there and back, and had bemoaned the indifferent service, the poor food and the uncomfortable seats.

The Air New Zealand flight, by comparison, was a revelation. The food (inspired by Peter Gordon) was excellent, the wine delicious, the seats (so far as they can be) comfortable, and the service – true to form – friendly and helpful.

When our young grandson was asked after a long night what he would like as a hot drink for breakfast, he wasn’t interested in the suggested tea or coffee but, when prompted, expressed interest in a Milo instead. A few minutes later, the steward returned with a cup made especially for him.

None of this means that Air New Zealand is perfect – no airline is, and long-haul air travel in particular is always a bind. But we are entitled to conclude that the particularly New Zealand characteristics they bring to their task do make a difference – and that is borne out by the consistently high ratings they register from passenger surveys and international awards.

That customer satisfaction is reflected, too, in the impressive commercial performance that Air New Zealand turns in. These are tough times for airlines but Air New Zealand, while having its own problems to overcome, has succeeded in business terms better than most.

But the real lesson to be learnt from Air New Zealand’s success is that treating customers as people and allowing the personality (and, in this case, the specifically New Zealand personality) of the company to shine through are not inconsistent with – and are indeed an important contributor to – a positive bottom line.

It is worth learning this lesson and applying it more widely, before we are all absorbed into the same homogenised global economy in which national characteristics and individual service are sacrificed to the over-riding drive to cut costs. No country has embraced the global economy more enthusiastically than New Zealand and – more than any other developed country – we have allowed large chunks of our national economy to pass into foreign hands.

The decisions that are made by those foreign owners are reached in boardrooms located far from our shores – in New York, Shanghai, or if we are lucky, Sydney – by people who know little and care less about what makes New Zealand and New Zealanders tick. They owe no loyalty or commitment to our values or ways of doing things; their sole concern is the short-term return on their investment.

What Air New Zealand’s success should tell us is that our peculiarly New Zealand way of doing things has a real value. That value can be measured and expressed in social and cultural terms by New Zealanders because they are familiar and comfortable with it but also by others who find it appealing precisely because it is unfamiliar to them; and, importantly, it also has a marketable value in commercial terms in today’s global economy. We would be foolish to give it up.

In his first term as Prime Minister, John Key made a determined effort to be all things to all men – and women. In his second term, however, he hasn’t bothered; he has clearly calculated that he can still win an election while quite overtly tipping the balance of advantage further in favour of the better off and against those who are struggling.

The evidence for this can be seen, for example, in the alacrity and openness with which he meets the demands of big business; but nowhere is it more apparent than in the burdens he is increasingly ready to place on working people.

The ranks of the poor in New Zealand have been increased in recent years by the unemployed and their families. The Key government’s indifference to their plight has been one of the least appealing aspects of its skewed order of priorities. But what has attracted less attention, perhaps, is the pressure now being put on families that depend on the earnings of those in work.

We have come a long way since the heady days of John Key’s commitment to close the wages (and living standards) gap with Australia. Far from trying to lift wages, the government is engaged in an undeclared campaign to depress real wages still further.

And that is from a starting point where low wages were already the central element in the widening income gap in New Zealand. We suffered the fastest widening of inequality of any country in the last two decades of last century, and remain dishonourably in the top group. The top 10% of income-earners enjoy today an income 9 times greater than the income of the bottom 10%, up from 5 times in the 1980s.

As Treasury research shows, New Zealand households in the lower half of the income range had no increase in real incomes between 1988 and 2010; all the increase in national income over that period went, in other words, to those who were already better off. Although labour productivity in the private sector rose by 48% over a similar period (1989-2011), the average hourly wage rose in real terms by only 14%.

The price we have paid for this intensification of inequality is not just financial. As workers’ rights at work have weakened, our shameful record on health and safety at work has worsened. In industries like forestry, where employees work long hours in a virtually deregulated workplace and labour costs as a proportion of total costs have fallen sharply, the rate of industrial accidents remains unacceptably high.

It is against this background that the government has intensified its assault on the ability of ordinary people to protect their living standards and safety at work. That assault has taken the form of a whole range of measures, such as maintaining the minimum wage at a level that is inadequate to halt the increase in family and child poverty and introducing a young workers’ wage even lower than the minimum wage. Low-paid workers in industries such as aged care are still expected to accept minimal wage increases that mean a further fall in their living standards. The unemployed are forced by benefit cuts and tighter rules about eligibility to try their luck in a labour market where there are few new jobs so that they are forced to try to undercut those in jobs that are already low-paid.

These factors are not accidental. They seem part of a deliberate strategy to remove the floor under wages and force them lower as a means of re-stimulating the economy. It is an amazingly convenient coincidence, is it not, that our slow recovery from the recession apparently depends on sacrifices made by the poor while we can afford more goodies for the rich.

The government is still at it. International research shows that the most important factor in determining the rate of wage growth is workers’ ability to use collective bargaining to negotiate wage rates. This is not surprising; individual workers have little bargaining power in the face of powerful employers and in a labour market weakened by high unemployment. It is only by joining with each other that they have any hope of protecting their wage levels and working conditions.

It is easy for those whose economic fortunes do not depend on collective bargaining to underestimate its importance not only to trade union members but also to a properly functioning economy. The right to organise in a trade union is recognised as fundamental in international conventions and the Universal Declaration of Human Rights and is an essential element in ensuring that a market economy operates fairly and in everyone’s interest.

But our government is pressing ahead with so-called “reforms” that in effect remove the right to collective bargaining and allow employers to refuse to engage with their workers other than on an individual basis. Sadly, this is just one more step in the campaign to reinforce the disadvantage suffered by ordinary people when faced with the overwhelming power of their employers in an unregulated marketplace. It turns back the clock to a society disfigured by division and inequality and an economy that fails to fire because it serves an increasingly narrow interest.

It was the Tory MP and peer, Quintin Hogg, later Lord Hailsham, who coined the phrase “elective dictatorship” to describe a government that – once elected – proceeds to ignore the wishes of the voters who elected it and to do whatever it wishes.

His point was that there is much more to democracy than the casting of a vote once every few years. In a properly functioning democracy, government is held to account – not least in parliament – and its decisions debated and often contested on a day-to-day basis. A government claiming legitimacy for its actions and decisions will ensure that this is so.

I was reminded of this important point when Nanaia Mahuta’s complaint about the inadequacy of facilities in our parliament for mothers with small babies was summarily dismissed by Rodney Hide in the Herald on Sunday. There was no problem, Hide asserted, because MPs did not need to be present in the debating chamber; they were required in parliament, not – it seems – to listen to, let alone participate in, the debate, but merely to act as lobby fodder.

As long as they cast their votes at the appointed time, it didn’t matter if they knew what had been said in the debate or even if they knew what the debate was about.

This offers a remarkable insight into how the current government and its allies view parliament and the democratic process. The notion that the elected members are there to exercise supervision and restraint over the executive – that the government needs to make and win reasoned arguments before making decisions – is obviously foreign to them.

Perhaps we should not be surprised. John Key’s government has given ample evidence of the contempt in which it holds parliament. Its majority in that parliament is, after all, the product of a disreputable deal with John Banks and its determination to preserve that arrangement is evidenced by its summary rejection of the public’s demonstrated wish to see – in the interests of democracy – reforms of our MMP voting system.

The government’s focus is clearly on preserving its majority, whatever the cost to effective democracy. And so little value is placed on parliamentary debate that the resort to “urgency” in passing legislation is now commonplace and has led to increasingly badly drafted law.

It is increasingly clear that – whatever the principles of our constitution may say – the government is unwilling to tolerate interference, not just from parliament, but from any quarter. It has now taken to ignoring the advice it receives even from its own departments, as in the cases of the Crown Minerals Amendment Act and the decision allowing mining on the Denniston plateau.

It has quite deliberately restricted the rights of citizens to go to law to contest government decisions, as in the shameful case of those who might wish to litigate the low level of remuneration paid to family carers. It has refused to publish the legal advice it has received on contentious issues like the criminalisation of protest against oil drilling on the high seas.

John Key has repeatedly made the argument that a policy on asset sales that is manifestly opposed, on strong grounds, by a majority of New Zealanders should nevertheless proceed because he and his party won the 2011 election. This is as stark an instance of an “elective dictatorship” as one could wish (or not wish) to see.

That argument has now been taken to even less defensible lengths on the issue of the Auckland convention centre. Not only are we told that the general election outcome means that the Prime Minister is free to strike whatever deal he wants to make with his big business cronies (in a secret process, in this instance, roundly criticised even by his parliamentary ally, Peter Dunne), but the Sky City boss then has the gall to jump on that bandwagon and to tell the public that the PM’s mandate means that they have no right to be heard.

It is now clear that the only people who have any chance of influencing the Prime Minister in his otherwise unbridled use of power are the leaders of powerful business interests. Warner Brothers can extract tax concessions and law changes without breaking sweat; petroleum and mining companies can have protesters outlawed and environmental concerns set aside; Sky City can have gambling protections relaxed and a licence to print money extended till 2048 – and parliament is threatened that any successor government would incur heavy penalties if it tries to change that arrangement.

A government that understands and values democracy would ensure that it was responsive at all times to the opinions of the voters. This is not to say that a government, including this one, cannot have its own way. But the strength of our democracy rest on assuring people of all views that they have at least been heard.

Our forefathers fought hard for our democracy. Whatever view we take of the government’s political stance, we betray that legacy if we fail to protest at the cavalier way in which democracy is now treated.

We have grown accustomed to treating crises in the euro zone as having little to do with us. So, there will have been a restrained response to the news of yet another crisis, even one that has provoked “outrage and panic” in Cyprus where it has arisen. But we should perhaps take a closer look, because what has happened in Cyprus could – in essence – happen here as well; and, if it does, we too would respond with outrage and panic.

This particular crisis does of course involve issues that are specific to Cyprus. Like many other euro zone economies, Cyprus is in urgent need of a bailout; and, as a condition of that bailout, European finance ministers are proposing that a somewhat unusual contribution to the cost of the bailout should be made by those who have placed their cash for safekeeping in Cyprus banks.

European finance ministers have announced (after markets closed last weekend) that the $25 billion bailout (Europe’s fifth) will come with a huge twist – a levy of 6.75% on deposits in Cyprus banks of less than $190,000 and 9.9% on deposits greater than that. The measures will raise, from those with deposits in Cyprus banks, about $10 billion.

The finance ministers are playing a dangerous game. They have their eye on the huge deposits kept in Cyprus banks by Russian oligarchs who apparently (but not for much longer) see Cyprus as a safe haven where not too many questions are asked.

But the risk they are taking is huge. If depositors find that their savings are not safe in Cyprus banks, there will not only be a mass withdrawal of funds from those banks (as is already happening), but from banks in other “bailout” countries as well. The euro zone crisis is on track to return with a vengeance.

What has this got to do with New Zealand, you may ask? The answer may surprise you. Our own Reserve Bank is well-advanced on just such a measure that would, in certain circumstances, present a similar threat to New Zealand depositors as well.

The “Open Bank Resolution” policy being proposed by the Reserve Bank is well-advanced and is framed in terms of settling in advance the question of who should bear which liabilities in the event of a banking collapse – whether of a single bank or on a much wider scale.

The current options in the event of a bank failure are limited – liquidation, government bail-out or takeover by another bank. The post-GFC history of the impact on government finances of bailing out failed banks has obviously reduced the appetite for such operations, and in most such cases there will not be a long queue of institutions willing to take over the failed entity.

The remaining option – liquidation – however, would immediately threaten the security of customers’ deposits, a political risk that governments would be reluctant to take. The Reserve Bank argues that in these circumstances the main priority should be to keep the failed bank afloat and functioning. They therefore propose that the bank should close for just 24 hours while a statutory manager is appointed and an assessment is made of the bank’s financial position.

A calculation should then be made of the proportion of customers’ deposits with the bank that would be needed to cover the bank’s liabilities and that proportion would then be frozen. The bank would then re-open, but the frozen deposits would be retained for the statutory manager’s use so that the bank’s financial situation could be stabilised. Any unused portion of the deposits could then be returned to the depositors. The balance (an as yet undetermined proportion) would be retained and lost to the depositor. Similar processes would be applied to shareholdings in the bank.

This proposal for what is popularly called a depositors’ “haircut”, on which the government and commercial banks are currently being consulted and which could well take effect this year, is presented in terms of a response to the failure of a single bank. But the measure would have its most significant impact in the event of a banking sector meltdown, such as might be triggered by a renewed global financial crisis – and who would bet against that?

As in the case of Cyprus, the New Zealand proposal is an astonishing assault both on the property rights of depositors and on confidence in the banking system. The mere fact that such a proposal is even being contemplated should ring alarm bells, even for a typically complacent New Zealand public – and if they were, like the Cypriots, actually denied access to their savings as they disappeared into the banks’ coffers, that would certainly be enough to trigger Cyprus-style “outrage and panic”.

The supposed need for such a draconian measure arises entirely because banks not only enjoy the unique privilege of creating money out of nothing but are also entitled to use their customers’ deposits for their own trading purposes. There can surely be no more compelling case for a fundamental review of the way banks operate in our economy. Shouldn’t we know more about this proposal and be consulted about it before it is too late?

As we enter the fifth year of this government’s term, and the sixth year of bumping along on the recessionary bottom, we now know enough to make an informed judgment of the government’s stewardship of the economy.

The usual economic indicators do not paint a pretty picture. Unemployment remains stubbornly high, manufacturing is weaker, the balance of trade is deteriorating, overseas borrowing is on the rise, the government deficit remains a problem, and poverty is increasing.

There is one bright spot, however – productivity. Not productivity in the usual sense of greater output per worker, which is still stuck at relatively low levels, reflecting no doubt equally low levels of investment and skill training; but the government has been remarkably productive in conjuring up excuses to explain our poor performance.

The first and main excuse is the “global economic situation”, which should certainly be a cause for some concern from a global viewpoint. But, paradoxically, the travails of the global economy have so far had little impact on us.

That is for a number of reasons. First, the global financial crisis left our Australian-owned banks virtually unscathed and they are still able to borrow with relative ease and at reasonable rates. We have quite simply avoided the huge burden imposed on other economies of having to re-build the credit-worthiness of their banking systems.

Secondly, our two major export markets and trading partners have been China and Australia, both of which (despite a recent Australian slow-down) have motored on through the global recession and maintained a pretty satisfactory rate of growth and therefore appetite for our goods.

Thirdly, and as a corollary of the second point, global commodity prices – particularly for our primary products – have been at high levels and have paid us (pace the overvalued dollar) a good return.

While future uncertainty (largely generated by the Germans who insist on imposing on the euro-zone a harsher version of the same policies as we have had to suffer here) is never helpful, there is actually little in the international situation to explain why we continue to bump along on the bottom.

But the government has a second ready-made excuse – the Christchurch earthquake. No one would have wished such a disaster upon us, but as an excuse for poor economic performance it suffers some limitations. Indeed, while it certainly means that we have to invest in re-building our asset base, it is also – often in the same breath – touted correctly as a major boost to the level of economic activity; without it, and the investment it necessitates, we would be in even deeper doldrums.

The truth is that the government’s excuses offer a convenient story to tell, but the real reasons for our sluggish performance lie elsewhere – at the government’s doorstep. High unemployment, manufacturing’s decline, and growing poverty, are a direct consequence of the priorities they have adopted.

The first mistake was the momentous decision to focus on the government’s own deficit, as though it arose somehow in isolation from the rest of the economy. By adopting this priority, the government ensured that other pressing problems – like unemployment, the country’s overseas borrowing, manufacturing’s difficulties – would remain unaddressed and get worse; and – paradoxically – the decision also ensured that the government deficit (made worse by the tax cuts given to top earners) would be more difficult to deal with.
The surest way to get the deficit down, after all, would be to get the economy moving again, so that less is paid out in unemployment benefits and more is paid in tax revenues by workers, consumers and businesses.

The government’s decision not only means that these issues are left neglected; by cutting spending, and trying to drive wages downwards, so that there is less money in people’s pockets, they have unwittingly done their bit towards creating a smaller and weaker economy overall.

Worse, they have made no attempt to counter or correct the real problems that have made life difficult for us over recent decades. They continue to preside over a policy that encourages the value of the dollar to rise, so that New Zealand workers are priced out of jobs and New Zealand goods are priced out of international markets.

They continue to focus on inflation (to the exclusion of problems like unemployment) and to use the single instrument of interest rates to deal with it, whatever the consequences for the real economy.

Alarmingly, they are content to “solve” our growing economy-wide indebtedness by selling off assets and allowing the control and income streams from our most important productive industries to pass into foreign hands – a certain recipe in the longer term for worsening our balance of payments, increasing our need to borrow, and losing control of our own economic destiny.

Even when the long-delayed recovery from recession does materialise, in other words, we will be heading straight back to the same old – but this time intensified – weaknesses. But, when these long-term failures do their inevitable damage, someone else will have to carry the can; this government will be long gone. It’s hard to think of a better definition of short-termism.